NEW YORK -- Delta is
planning a major shift from domestic to international service as
part of its restructuring under Chapter 11 bankruptcy protection,
revealing plans to reduce its domestic mainline capacity by 15% to
20% and increase its international capacity by 25% in 2006 to
pursue routes with greater profit potential.
The domestic
reduction includes the 26% cut in capacity Delta is implementing at
its Cincinnati hub on Dec. 1.
Delta also said it
will eliminate 7,000 to 9,000 jobs by the end of 2007. It also
plans to reduce pay scales by 7% to 10% for most frontline
employees earning more than $25,000 a year, and cut salaries by 9%
to 15% for all management employees except CEO Gerald Grinstein,
who will take a 25% pay cut.
Delta will move
quickly and decisively to do what is necessary to beat our
competitors and meet our financial commitments, and this means we
will become a smaller, more cost-efficient airline with a
strengthened network and a stronger balance sheet, Grinstein
said.
Delta never publicly
mentioned another recent and significant change, but it did provide
the details in its Chapter 11 filings: The carrier quietly added a
three-night minimum or Saturday night stay requirement on some of
its lowest fares in early September to try to boost its
revenue.
That change
partially reinstates a requirement Delta had eliminated with
fanfare when it implemented its simplified fare system,
SimpliFares, in January.
Delta defended the
elimination of the minimum stay requirement as recently as July,
when an analyst suggested Delta would benefit by implementing even
a one-night requirement.
In its Chapter 11
filings, Delta said it expects the new requirements to add $30
million to $35 million to its annual revenue.
To contact
reporter Andrew Compart, send e-mail to [email protected].